Unit cost of gasoline in dollars per litre in real terms

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Reference no: EM131097172

A new technological line of gasoline production has the following parameters:

- annual production is 21,408 litres;

- purchase price is $87,374

- operatining costs are $854 per year;

- depreciation rate is 20%;

- service life is 5 years

Expected annual inflation is 5%. If current interest rate is 10%, what is the unit cost of gasoline in dollars per litre in real terms?

Reference no: EM131097172

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